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Islington London Borough Council v University College London NHS Trust, Court of Appeal, 16 June 2005

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21 June 2005

The issues

Care – Recovery Of Care Costs By Local Authority From Tortfeasor

The facts

Mrs J suffered a stroke whilst in the care of Middlesex Hospital. By its defence the hospital trust admitted that the stroke was caused by its negligence. A structured settlement of her claim was entered into on 28th September 2003. Until that date she had been cared for by the Claimant local authority in residential care under Section 21 of the National Assistance Act 1948. The structured settlement enabled Mrs J’s daughter to buy her a house in which to care for her together with the sum of £40,000.00 per year payable as long as she remained in the care of her daughter.

The cost of care caring for Mrs J to the local authority was £81,210.94. The local authority was under a statutory duty to charge Mrs J for the care provided to her or to assess her ability to pay for that care. In so doing they were bound in law to disregard the compensation under the settlement for the purpose of calculating her liability. As a result she could not recover the care costs from the Defendant because she was not herself liable to pay them. She suffered no loss resulting from these care costs and made no claim in her proceedings for those costs. The local authority asserted that the Trust had escaped liability to pay because her means were such that she had to rely on local authority care. They sought to recover the care costs from the Defendant in negligence.

The Judge found against the local authority dismissing its action against the Hospital Trust on the basis that the Trust did not owe a duty of care to the local authority. The local authority appealed.

The decision

1. It could only succeed by demonstrating that the relationship between itself and the Hospital Trust satisfied all three of the criteria in Caparo, namely foreseeability, proximity and whether it was fair, just and reasonable to impose a duty.

2. Foreseeability – The Judge had been persuaded to set too high a standard in determining what was foreseeable. The Hospital Trust which inevitably worked closely with authorities in arranging post hospital care must be taken to have known that the range of patients whom it treated would have a range of care requirements and financial needs. Care by a local authority in a case in which it could not recover the cost of the care could not been seen as to be so unusual as to fall outside the range. Just as in Jolley v Sutton the precise manner in which the injury occurred did not have to be foreseeable so in this case the Hospital Trust did not have to know that hospital care would be required on behalf of Mrs J and that she would not be able to pay for it but it would only have to have institutional knowledge that some patients with Mrs J’s disability would fall into that category.

3. The provision of care to Mrs J by a local authority that could not recover the cost of that care for Mrs J was therefore reasonably foreseeable.

4. Proximity – the requirement of proximity had an uncertain status. There were some cases in which it had been specifically applied as a vehicle for limiting liability on policy grounds. In this case once it was accepted that the provision of gratuitous care by Islington fell within the range of outcomes foreseeable by the Hospital Trust then it was difficult to see how the relationship between the Hospital Trust and Islington failed because of a lack of proximity. It had been suggested that it was possible to construct an incremental extension of the law of negligence that would cover this situation in this claim on the basis of three previous cases; White v Jones, Spring v Guardian Assurance and Kirkham v Boughey. In each case a person other than the immediate object of the act of negligence had recovered for the affect of that negligence upon him. In reality on a more detailed analysis each of those cases was a long way from Islington’s claim. White v Jones was a conferment of benefit case – the beneficiary lost what the solicitor knew the testator had intended to give him. In Spring, although it was a creation of detriment case, the relationship between three parties was very similar to that in White v Jones. The report of Kirkham v Boughey was not entirely easy to follow and the Court appeared to view the husband’s claim in the context of a claim for loss of consortium with his wife and for that reason was a special case. It was a fragile basis for the generalisation that the Claimant relied upon.

On the other hand there were indications in other areas of the law unhelpful to Islington’s case. In particular it had never been envisaged that the National Health Service had a cause of action in negligence against the tort feasor, any such recourse having to be achieved by special statutory provision.

5. Fair Just and Reasonable – the requirement of this limb of the Caparo test was not to be read literally or only in the context of the relationship between a particular Claimant and Defendant. It had to be taken in the context of assuming that wider issues of policy might have to intervene.

In simple terms the concern in this case was that in order to correct what would seem to be an inequitable distribution of liability between two public authorities the common law of negligence was being asked to do a job for which it was not qualified.

Firstly a decision in Islington’s favour would have implications for other providers of public services including for example Education Authorities. This was a task for law reform rather than law making.

Secondly, each party to this action was a public authority with very different sources of funding. The sorting out of the present position whether accidental or not was a matter for Parliament or political decision rather than for a Court deciding a particular case.

Thirdly, if this case was unusual in that tort feasor was a public authority and part of the caring professions.

Fourthly the Court would have to rationalise the existence of a direct action by the local authority against the tort feasor in a context where neither a private provider of care nor the NHS LA enjoyed such a right.

There were important and over riding considerations why the Court could not take the step that Islington required. Appeal dismissed.

focus on...

Contingent loss is relevant to limitation; specifically, the date at which a claimant’s cause of action accrues for the purposes of a claim in the tort of negligence (as many claims against professional advisers are framed).

Companies should undertake a comprehensive review and audit to identify those products and legacy contracts that are LIBOR-linked and carry out an in-depth risk assessment of discontinuation. Where possible, companies should look at appointing an individual to oversee the programme.

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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